Notwithstanding an easing in the quarterly pace of growth over the past three months, year-on-year growth in air freight tonne kilometres (FTKs) has made a strong start to 2017, said the International Air Transport Association in a new report.

Air freight outperformed wider world trade since mid-2016, the “Cargo Chartbook Q1 2017” said, adding that European and Asian carriers have driven the bulk of growth.

Traffic growth has been fastest on international segment-based routes within Asia, as well as between Asia and Europe.

Demand conditions across the Pacific have weakened over the past quarter, and broader momentum in FTKs has slowed. However, it is worth noting that there are a lot of complicating factors at this time of year, including Chinese New Year as well as the fact that 2016 was a leap year, the report said.

Market drivers

The pick-up in air freight over the past nine months has been set against a broad and synchronized upturn in global economic conditions. Consumer confidence has risen particularly strongly.

More generally, the trade backdrop has also improved, particularly for emerging economies.

The new export orders component of the global manufacturing PMI remains close to a six-year high, and is consistent with year-on-year FTK growth of 7.5 per cent in Q2 2017.

Capacity, costs and yields

Additional payload from wide-body belly capacity in the passenger fleet has continued to exceed that from freighter-only deliveries so far this year.

Large freighter utilization increased into 2017, alongside a recovery in the load factor.

Crude oil prices trended upwards during much of 2016, and are currently around $55/bbl. But this is around the levels seen during 2011-2014, and markets expect them to rise only gradually. The downward trend in freight yields has stabilized.

Survey respondents are positive about growth outlook When surveyed in January by Iata, airline heads of cargo were positive about the outlook for cargo demand over the next 12 months. Nearly two-thirds of respondents reported that they did not expect cargo yields to change over the year ahead, although the weighted score remained below the 50-mark for the tenth consecutive quarter. – TradeArabia News Service